DIFC: Changes to the Employment Law

On 4 March 2021, we published an article setting out the proposed changes to the DIFC Employment Law No. 2 of 2019 (as amended) (Employment Law) and the DIFC Employment Regulations 2020 (Regulations) from the Consultation Paper issued by the DIFC Authority in February 2021 (Consultation Paper). Our previous article on the proposed changes can be accessed here.

On 21 September 2021, the Employment Law was amended by DIFC Law No.4 of 2021 (Amendment Law) and the Regulations were amended by the Employment Regulations 2021 (New Regulations). While they largely codified the changes proposed by the Consultation Paper, there were a few differences to the proposals in the Consultation Paper which are set out below.

Amendment Law

All proposals listed in our previous article that were set out in the Consultation Paper were implemented in the Amendment Law. However, as referenced above, there are some additional changes in the Amendment Law that were not included in the draft law that accompanied the Consultation Paper. In particular, the Amendment Law strengthens the rights of Secondees and Short-Term Employees (both as defined in the Employment Law). Employees on Secondment will now be subject to provisions relating to settlement agreements, the general duties of employees and protection from discrimination and victimisation. Short-Term Employees are now also entitled to protection from discrimination and victimisation. The Amendment Law also adds the definition of “Affiliate”.

Of particular interest was the confirmation in the Amendment Law that certain employer health and safety duties do not apply if the employee is working from home. Previously, the Employment Law had assumed that employees would work from the employer’s DIFC premises. This is the first time that the Employment Law has formally taken into account the fact that employees are engaged increasingly in flexible working practices. This amendment appears to be as a result of changes to working practices brought about by the Covid-19 pandemic.

New Regulations for Employee Savings Arrangements (Qualifying Schemes)

Similarly, the proposals from the Consultation Paper in relation to the Regulations were largely implemented and therefore only a Qualifying Scheme established by way of DIFC Trust, with the operator and administrator in the DIFC will be issued a Certificate of Compliance. In relation to specific employees where the employer is under a statutory duty in another country to make pension, or other similar, contributions will be issued a Certificate of Compliance. Yet, one change is that the fee for the issuance of an Exemption Certificate will be $500 rather than $300 as initially proposed in the Consultation Paper. This is in line with the fee for a Certificate of Compliance which is also $500.

Conclusion

Anyone with an interest, or currently doing business, in the DIFC should be aware of the changes and, if necessary, take steps to ensure that they are compliant with both pieces of legislation. The changes brought about by the Amendment Law to the Employment Law came into force immediately, and therefore should be addressed as a priority. Any company holding a Certificate of Compliance or Exemption that is not compliant with the New Regulations has a one-year grace period from 21 September 2021 in order to rectify this.

For any queries relating to this (including our assistance in complying with these obligations) and other general DIFC or UAE employment related matters, please do not hesitate to contact David McDonald.